The Value Difference
In a continual pursuit of customers, companies aim to uncover what matters most to potential buyers of their products and services. Although price is important, customers also consider and evaluate product/service features that will add value to their purchase. Customer loyalty is built when providers consistently deliver on these value drivers.
Value is simply the difference between product/service benefits vs. the cost of acquiring that product/service. Customers will consider the value of each of the potential products/service when making a purchase. And, will buy the product/service with the highest value, to them.
Non-price characteristics (i.e. customer service, technical expertise) will amplify or dilute the value perception. However, the degree to which this occurs differs among the customer set or even customer bases. Some customers may be completely driven by price. However, others might be wiling to pay a slightly higher price in exchange for excellent customer service, or ongoing technical support.
Customer segmentation helps identify the psychographic and/or demographic clusters that comprise attractive customer segments to which to market the "value drivers" that are most important. Conducting an analysis that identifies the attributes that matter most to current customers, lost customers and customers of competitive brands, helps companies to strengthen their position. In addition, it can help to create marketing strategies to entice non-customers to consider their alternative (based on how their strengths may align with their values).
Tricone Marketing Research utilizes a quantitative technique that is based on Customer Value Analysis (CVA). This technique helps companies better understand:
•The attributes that matter most to customers, lost customers and the customers of competing brands
•How customers define product and service attributes
•The importance of price in the decision-making process
•How the brand is performing against the competitive set across attributes
•Opportunities to gain market share – for the brands in the competitive set